Robert (“Bob”) M. Worsley ... was the Chairman of the Board, Chief Executive Officer and President of SkyMall, Inc., which he founded in 1989, until his retirement in 2003. During his tenure at SkyMall, Mr. Worsley was successful in leading the Company through a $16 million IPO in 1996 and a $70 million sale to Newscorp’s Gemstar affiliate in 2001, and growing the business to become the largest in-flight catalog company in the United States with over $85 million in annual revenues.

"Mark up" #1: $70M sale to Gemstar in 2001?

It seems odd that every article we have found indicates that the sale price was more in the $47 million range.

Let's also take a look at the number of employees from his most recent venture, Renegy Energy. Oops. That company found itself in financial trouble less than six months after their $85M biomass plant opened in Snowflake which led to an almost 50% reduction in its workforce.

By early January, Renegy plans to reduce its workforce to a total of 48 employees, of which seven employees will constitute its corporate staff, representing a 47% reduction in force compared with 90 employees at September 30, 2008.

The "estimated" 1000 jobs is closer to 414 in its prime. Job losses between the two companies totalled 167 for a net of 247 jobs created (or shall we say, "saved"?).

1996 Income of $2.5M
1997 Income of $2.9M
1998 Income of $3.6M
1999 Loss of $25M
2000 Loss of $16M
2001 (1st quarter prior to sale) Loss of $2.5M

As you can see, while the 1999 and 2000 revenues may look impressive, SkyMall was actually operating at significant losses of $25M and $16M respectively. Even leading up to the sale to Gemstar, they were on track to lose another $10M in 2001. In an effort to reduce losses, Skymall went through major restructuring in 2000. They retained the Investor Relations firm Genesis Select to identify potential investors who could leverage SkyMall's distribution and inject additional capital into the flailing company.

"Genesis Select also identified and helped recruit a new President and CEO. The candidate was a well-established operator in retail merchandising, and was also well known with institutional investors. With the critical pieces now in place, Genesis Select introduced SkyMall to Robertson Stephens, who was retained by SkyMall as their investment banker. This relationship led to the purchase of SkyMall by Gemstar –TV Guide in March of 2001 at an attractive valuation in deteriorating market conditions for Internet stocks."

SkyMall consolidated offices in New York and Utah which eliminated at least 53 employees at a cost of $2M. An additional 70 employees were also laid off in 2000.

More SkyMall controversy.

The stock value of SkyMall (SKYM) wildly fluctuated since it first went public. Here is a chart that shows the highs and lows per share by quarter:

1998
1Q 4.00 - 5.38
2Q 4.00 - 7.50
3Q 2.25 - 5.644Q 1.88 - 4.30

19991Q 11.38 - 27.13
2Q 9.00 - 23.13
3Q 5.55 - 12.63
4Q 5.25 - 13.13

2000
1Q 7.00 - 10.19
2Q 2.31 - 6.63
3Q 2.00 - 3.63
4Q 1.06 - 2.50

2001
1Q 1.00 - 2.63

Notice the sudden spike in the stock price between 4Q 1998 and 1Q 1999?

On Monday, December 28, 1998, SkyMall announced that they expected their internet sales to grow "sevenfold" during the next year.

"Shares of the nation's largest in-flight catalog retailer soared yesterday rising to $48 before closing up 23 at $35.56 after it said Internet sales were expected to jump sevenfold."

You can tell by the 1999 revenue chart above, SkyMall only increased revenue by $7M and after the cost of goods were deducted, the gross margins were actually less than the previous year. SkyMall also saw a record loss of $24M during 1999.

So, where did SkyMall get the idea that they would be able to forecast a "sevenfold" increase in their internet sales going forward?

Coincidentally, on Thursday, December 31, 1998, an article announced that the SkyMall CEO, Bob Worsley, had sold 675,000 shares of SKYM at $35/share. He then used that money to buy out two of his partners at a pre-determined share price agreed upon back in October of $6.75 and $7.35/share. This gave Worsley a 54% stake in the company.

Needless to say, the circumstances of the sales projection announcement coupled with the massive sell-off of Worsley's shares at an inflated value to buy off his partners at a significantly lower price seemed a bit...shall we say...suspect?

We weren't the only ones who thought so. SkyMall and Worsley were taken to court over possible SEC violations. The complaint charged the defendants

"... the complaint alleges on December 28, 1998, SkyMall
announced in a press release that the Company’s Internet sales were expected to
increase by 600 percent over the previous year. As a result of this
announcement, the price per share of SkyMall’s common stock soared from $12 to $48, and closed at $35. That same day, unbeknownst
to the investing public, including plaintiff and the members of the class,
SkyMall’s President and CEO, took advantage of the anticipated surge in the
value of the Company’s stock by selling 675,000 of his shares of SkyMall common
stock at an average price of $35 a share. He then used the proceeds from those
sales to exercise options which he held to purchase 2.9 million shares of the
Company’s stock at an average price of $7.23 a share....Further, the complaint alleges on or around December 30, 1998, when it became
publicly known that SkyMall’s President and CEO had taken advantage of the
expected dramatic rise in the price of SkyMall’s shares caused by the December
28 press release by selling 675,000 of his shares at inflated prices, and then,
by exercising his options, increasing his equity stake in the Company from 2.3
million to almost 4.6 million shares, the price of SkyMall’s shares plummeted to
$27 3/4 a shares."

The Court issued a final judgment in December 2002 dismissing the action "with prejudice." The Plaintiff was reimbursed attorney fees and expenses of over $88,000.

As part of the sales agreement in 2001 between SkyMall and Gemstar, Worsley was required to transfer his SKYM stock over to GMST stock. Gemstar agreed to pay $2.80/share for SkyMall stock. At the time of the sale, Worsley had a 30% stake in SkyMall and 4.8M shares.

Worsley "retired" in 2003.

Four years later, Worsley began work on his next (failed) project at Renegy, LLC. When money was quickly drying up, he once againretained the services of Genesis Select to help improve Renegy's exposure to institutional investors.

You can hear Worsley inflate his role and qualifications as a small business owner on his campaign website here. In the video, Worsley mentions that he sat in a room across from Rupert Murdoch to personally negotiate the sale of SkyMall. However, we are unable to either confirm or deny this account because according to the SEC report (pg 36), Mr. Murdoch was not mentioned as being present in the room when discussions took place. During the same month in 2001, Murdoch was negotiating a $70 BILLION merger attempt with DirecTV . We aren't sure how critical it would have been for Mr. Murdoch to be a part of the negotiations for a $50M company when News Corp only held a 39% stake in Gemstar.

SkyMall and Gemstar met at the offices of Gemstar in Pasadena, California on March 3, 2001. representatives of Gemstar that attended the meeting included Dr. Yuen, Elsie Leung, Chief Financial Officer and Co-President, Mike Jeffress, Vice President of Business Development, and Jim Gregg and Eric Jue, both of Gemstar's Business Development Group. SkyMall management that participated in the meeting included Mr. Worsley, Mr. Deacon and Ms. Aguilera. A representative from Robertson Stephens, SkyMall's financial advisor, also attended the meeting.

If this is how Worsley does business, just imagine what he might do to a state budget...

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Too Long/Didn't Read

Too Long, Didn't Read (TL/DR) sectionIf you give a kid an iPad, he'll have to have an Internet connection. And if he has an internet connection at school, he can have one at home, too. If you have an Internet connection at school and home, you can implement digital textbooks. If you use digital textbooks, you can easily create digital exams which everyone can take. If you create digital exams for everyone, you will need to teach a common curriculum. If you teach a common curriculum, he can pull out his free iPad from his backback to create an advertising brochure for a green energy company in 7th grade math class. If he creates green energy brochures in math class, he will be completely unprepared for the real world. But, at least he has a free iPad.

Rich Crandall admits he has spent 5 years working alongside leftists intent on destroying our educational system and "equalizing" outcomes. CCSS is FAR from a "state-led" effort. It was conceived, written, implemented and funded by leftist organizations and an Obama Administration whose goal is to "transform" America using our children.

Obama's "Green Ribbon"awards in Arizona. Just another way to implement Agenda 21 in our local schools. Less about learning and more about brainwashing.

Jeff Flake was FOR Comprehensive Immigration Reform before he was AGAINST it after he was FOR it.

Robert Graham prides himself on single-handedly defeating Prop 121 which had no chance of winning to begin with and lined the pockets of political consultants along the way. "Conservative" Graham's ARL PAC also donated to Orrin Hatch as well as the Republican Victory Fund who used that money to support Rich Crandall over John Fillmore in a primary election.

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